In the modern age, phone systems are interconnected with the computer network but often overlooked as a vulnerability. Fraudsters can invade the privacy of phone systems through the customer’s network or the telecommunications service provider. The moment they gain access, they manipulate the phone system to make unauthorized calls leaving the customer with a hefty bill.
Telecom Fraud is a grave threat to the telecom business market. This fraud is exploitation of telecommunications mainly including cell phones or services with the intention of illegally and deceitfully acquiring money from a communication service provider or the customers.
Major Categories of Telecom Fraud
There are several telecom fraud schemes and it can be divided into three broad categories, based on who the fraudsters are targeting. These categories following are:
To Defraud Telecom Service Providers
This type of schemes are the most complex and exploit telecom service providers using loopholes, SIP trunking, and many more discrepancies.
Traffic-related schemes use holder's access techniques to try to increase traffic to a high-cost destination, which then shares the revenue with the fraudster.
Phone Fraud covers all types of general fraud that are perpetrated over the telephone. Phone fraud is a nuisance for millions of customers, companies and service providers.
The methods include plenty of artificially generated traffic by hacking into corporate switches, missed call campaigns, false answers, which are examples of fraud that causes high costs for the victims.
Telecom Fraud Management
Not one telecom service provider can escape from fraud. Any type of Fraud reduces Organization's profits, affects good customers and lowers operational efficiency. The real costs may exceed lost revenue and involve unwarranted network, investment, diversion of resource, and customer displacement. The actual impact is rarely measured, reducing visibility and effectiveness.
Fraud Management System provides the required technical and business skills to support both strategic and tactical fraud management efforts. It recognizes that resources are limited and try to find profit-enhancing solutions on time.
Benefits of a Fraud Management System
Fraud Management System(FMS) is a special tool designed to effectively detect, analyze and report on fraudulent events which ultimately impacts the revenue and cost streams of the business.
No FMS can entirely provide an absolute solution to effectively detect and fix the problem, the Fraud has to be detected with Fraud Analysts who have sufficient skills and knowledge to understand the process. They must have the information to direct the Fraud Analyst through the investigative stages, but most importantly there must be a clearly defined strategy for FMS.
Quality of Data
The quality of data used and monitored within an FMS is high since it is retrieved directly from the sources or a middle platform. This produces a high level of clarity on what the origin of the data was and assuring that frauds identified are based on accurate data.
Telecom Fraud Management System has to be flexible to handle any type of data and create flexible rules on any type of event, it is also necessary to address the changing dynamics of fraud and future fraud threats in next-generation technologies, products and services.
The flexibility is an important asset for the Fraud Analysts as it provides the capability to test and verify various thresholds and alarm settings to maximize their capabilities of fraud detection.
The extraction, automation and processing of the events are performed with little or no human intervention. FMS can interface different types of data sources to ensure visibility and usage on a wide range of products and services.
Dashboard view and the nature of fraud being detected within the FMS visible is a key tool for a Fraud Manager. This allows the Fraud Analysts to view Key performance indicators, analyze whether fraud detection targets are being met, and review the performance to ensure cases are being managed and resolved properly.
Therefore, Fraud Manager is enabled to determine whether the FMS performance and resources are both operating with the fraud strategy.
Case Management tool ensures all fraud incidents are identified, recorded and tracked in a location. This information can be used to identify fraud syndicates and track fraudsters, where links are identified between new and old cases.
Additionally, it ensures that all the information related to a case can be stored at a later stage. This also enables to track the performance of the Fraud Analyst cases to ensure defined processes are being met and followed.
Telecom Fraud Protection
Globally, Telecom Fraud is increasing at an alarming rate and is one of the biggest sources of revenue loss for every telecom operator or service provider. Businesses today are spending millions protecting themselves from fraudsters. They are mainly on the reactive and defensive mode, with bottom lines under huge pressure.
The Telecom fraud management team can significantly detect the frauds in telecommunications. For Fraud management, it requires a dynamic skilled staff, using flexible tools, and a defined process.
The competition against fraudsters can never be won due to the fast-moving telecoms environment and the drive to launch complex products quickly to attract market share and maintain a competitive advantage, leading to technical weaknesses and risks which fraudsters will rely upon the opportunity to keep the fraudulent business activities operational.
Must have tools for startups - Recommended by StartupTalky
Subscribe to Startup Talky
Get the latest posts delivered to you right in your inbox